captioning sponsored by macneil/lehrer productions >> lehrer: good evening. i'm jim lehrer. the nation's unemployment rate rose to 9.6% last month, despite the addition of 67,000 private sector jobs. >> woodruff: and i'm judy woodruff. on the newshour tonight, christina romer, the outgoing head of the president's council of economic advisors, reacts to today's numbers, and we ask her about the administration's approach to the economy. >> lehrer: paul solman examines the rising number of burned out employees in the country who are doing more for less.

>> we're working more but we're not seeing any rewards for that. it's very frustrating. >> woodruff: then, margaret warner in baghdad reports on iraqis' daily frustrations with an essential element of modern life-- electricity. >> lehrer: mark shields and david brooks give their analysis of the week's news. >> woodruff: and tom bearden, in morgan city, louisiana, looks at how even the b.p. oil spill couldn't stop the 75th annual shrimp and petroleum festival. despite a lot of concerns about the future, this town is ready to party. >> lehrer: that's all ahead on tonight's newshour. major funding for the pbs newshour has been provided by:

and with the ongoing support of these institutions and foundations.

and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. >> lehrer: the august jobs report turned out a mixed bag of results today. there were slight improvements in the private sector, but they were not enough to reduce overall unemployment. ray suarez has our story. >> suarez: more people found work in construction as the summer closed, and in hospitals and other health care work. in all, private employers added 67,000 jobs, a modest gain, but better than expected. at the same time, the public sector shed 121,000 positions, most of them temporary census jobs. the bottom line-- a net loss of

54,000 jobs nationwide in august. president obama urged patience in the white house rose garden this morning. >> jobs are being created; they're just not being created as fast as they need to, given the big hole that we experienced. >> suarez: indeed, some nine million jobs were lost in 2008 and 2009, and adding tens of thousands of jobs per month is just not enough to make up that deficit. the labor department did raise its estimates for june and july today. it meant private business added 235,000 jobs this summer. but as economist lisa lynch told the newshour last month, that's the kind of number needed each month. >> what we really need to see out of the private sector is month after month of 200,000 or more jobs. >> suarez: as it is, the unemployment rate ticked up to 9.6% in august as more people came off the sidelines and began looking for work. the rate has been near or above 10% for more than a year.

all told, nearly 15 million americans are unemployed. and the under-employment rate is now 16.7%, including the unemployed, those who've stopped looking for work, and part- timers. that comes to more than 26 million americans. the jobless rate promises to be a prominent issue in the upcoming midterm congressional races. today, house republican leader john boehner insisted things won't get better under the president's policies. he said in a statement: mr. obama renewed his call for a small business tax cut, and he again blamed republicans in the senate for blocking it. >> woodruff: we have more on the jobs report coming up in an interview with white house economic advisor christina romer. that will be followed by a look at overworked and underpaid

americans; the other power failure in iraq; shields and brooks; and a celebration of shrimp and oil in louisiana. but first, the other news of the day. here's hari sreenivasan in our newsroom. >> sreenivasan: wall street took some encouragement from the jobs numbers. the dow jones industrial average gained more than 127 points to close near 10,448. the nasdaq rose more than 33 points to close above 2,233. in all, the markets had their best week since july. the dow gained nearly 3%; the nasdaq rose more than 3.5%. hurricane earl lost a lot of its punch today as it churned north off the east coast. the storm's winds dropped to 80 miles an hour after swiping at the north carolina coast. the storm's western edge blew over the outer banks in the middle of the night. but apparently, hurricane-force winds never reached land, and the sun rose to reveal only

minimal damage and choppy surf. road crews worked to clear sand- - in some places, three feet deep-- but there was no major flooding. north carolina governor bev purdue voiced relief that earl stayed farther offshore than feared. >> purely and simply, we dodged a bullet, and we're glad that the bullet is out of our state, for the most part. >> sreenivasan: the hurricane still had the potential to do damage as it headed north, on course to pass new england tonight. and a series of states remained on alert. in the mid-atlantic, both virginia and maryland saw stronger waves and wind as earl passed. >> it's almost like you're in a sandstorm. >> it's my first hurricane, or somewhat hurricane. i was expecting more wind and more rain, but the waves are pretty ominous. >> sreenivasan: lifeguards watched over swimmers in new jersey, where one person had already drowned and another was missing. on long island, new york, officials said they still expected heavy rain, flooding, and power outages.

>> the storm has actually slowed a bit, which you might think is good news, but it means that it may linger over us for longer than we thought, which means more rain. >> sreenivasan: and in massachusetts, governor deval patrick warned against under-rating the storm. >> the public should continue to take precautions-- stay indoors and off the roads during the height of the storm. exercise extreme caution this afternoon when winds pick up. >> sreenivasan: out on the bay state's coast, inmates from the plymouth county jail shoveled and stacked sandbags. nearly 400 out-of-state utility crews were staged and ready. but as earl kept moving, officials up and down the coast hoped to salvage tourist revenue through labor day weekend. another bombing in pakistan has killed 54 people. it happened in quetta in the southwest, the latest in a series of such attacks. a suicide bomber targeted shiites staging a pro- palestinian rally and procession

through the city. police said 160 people were wounded. the pakistani taliban claimed responsibility, and a spokesman claimed the group will launch attacks in america and europe very soon. in afghanistan, the u.s. death toll rose again, with another american killed today. it came as defense secretary robert gates visited u.s. troops in kandahar, the birthplace of the taliban. he said he saw progress there and in pakistan, where government forces have attacked insurgents in their safe havens. >> you had asked me two years ago if i thought the pakistani army would have 140,000 troops on their western border fighting some of these extremists. be in swat, places like that i would have thought you were smoking something. >> sreenivasan: pakistani officials reported today that u.s. air strikes killed seven people in the border region. they said drone aircraft fired missiles in two separate attacks. there've been more battles in mexico's drug war.

soldiers killed 25 suspects thursday in a border town not far from mcallen, texas. they killed five more today in a shootout in juarez. all of the gunmen were believed to be members of the zetas gang. that group is suspected in the massacre of 72 migrants last month. those are some of the day's major stories. now, back to judy. >> woodruff: today's jobs report was the latest data to show just how slowly the economy is recovering from the recession and financial crisis. as the chair of the president's council of economic advisers, christina romer has helped shape the administration's approach since the president took office. i spoke with her a short time ago from the white house on her last day. >> dr. romer, thank you for talking with us. >> it's great to be with you. >> woodruff: today's jobs report, there was some good news, more jobs created in the private sector. but not enough to make a real dent in the overall unemployment picture. what is it going to take to

get more jobs created? >> so i think your characterization is exactly right that we did see the 8th condition selective month of private sector job growth. and 7,000 is certainly better than most analysts have been anticipating. but it certainly is not the kind of robust job growth that i know the president wants. he talked in the rose garden today about how we need to get that number high soar that the unemployment rate comes down. you know what the president has been talking about, and certainly looking at is a range of targeted measures. no one is talking about a second stimulus. they're talking about arbss that can address some of the particular headwinds that we face so we know, for example that small businesses often tell us they what like to create jobs if only they could get the credit they need to do some investments and get their business growing. and so he made a plea today for congress to pass the small business jobs and tax cut and lending bill. and that is certainly going

to be something that's important. but there a range of other actions that we think could help to make those numbers stronger. >> woodruff: and if had in fact it was reported today that the president is considering a temporary payroll tax holiday. he's looking at other business tax, research and development measures. do you think those would make a real dent in employment? >> you know, what we do know is that the main source of demand, the main source of job growth is going to have to be the private sector. is going to have to be consumers getting their confidence back and buying goods. it's going have to be firms doing investment, exports. but certainly the kind of actions that are being discussed and i should emphasize this no decisions have been made that those kind of actions can make a material difference and especially by addressing particularly weak areas. i think they can be very important. >> woodruff: federal reserve board chairman benzodiazepine ang said recently that he thinks the unemployment rate is going to stay well above 7%

through the end of 2012. do you share that view? >> well i certainly... my advice is i think the important thing is to do everything possible to make sure that that doesn't happen. that ctainly what i was talking about in a speech that i gave a couple of days ago is that we do have tools for bringing down the unemployment rate. we can do them in a fiscally responsible way. and i think we should-- we certainly shouldn't be lowering our sights. we should be saying what are the actions that we could take to make sure that the unemployment rate comes down quickly and returns to normal levels. >> in that speech that you gave this week, dr. romer, you said among other things that you failed to anticipate just how violent this recession would be. it was a pretty searing self-indictment that you delivered. are you taking full responsibility for what went wrong with this administration's forecasts?

>> you know, really what i was talking about is both my own failures. but of course i think one of the things i emphasized is that analysts across the ideaological spectrum failed to anticipate how severe the crisis would be. you know, i think one of the things i tried to describe is we were in unchartered territory. this is not a typical postwar recession. it was caused by a financial crisis and the biggest economy, the center of the world economy. something we haven't seen since the great depression. and i certainly was very frank that there were things that i got wrong, that none of us really knew or anticipated. you know what i do feel good about is one that we have learned. that we certainly, we gave it our best shot. we very much told the president that this was a serious crisis. we should do all that we could and i think we did get as big a recovery act as we could have gotten through congress am but you know what we've done ever since

then. we didn't just stop there it it's been a constant process of thinking about what more do we do for the financial system. what are the evolving steps. and i think that is really the test of policy. >> knowing what you know now, what would you have done differently? >> knowing what you know now is you say, the unemployment rate is 9.6. now two years almost into the crisis. that of course what you would do is be a more aggressive probably on every front. that you would be working even harder on the financial system, on the recovery act, on the housing program, on, you know, the whole range of actions that we've taken. you know, we obviously just judging from where we are now, of course, none of us want to be here. so we certainly would, i think, have been more aggressive along all dimensions. >> woodruff: bigger stimulus it was reported that you favored a much bigger stimulus than what the white house ultimately pushed. >> i think the white house

ultimately pushed as big a stulus as we could get through congress. and you know i think it's important to keep in mind just how big the american recovery and reinvestment act was it was the biggest fiscal stimulus we have ever done in this country it has made a tremendous difference. and i am very proud that that action was taken. i think it's a big part of why we didn't sink into a second great depression. where we are is not good but it would have been so much worse without the policies that were taken wtz white house does seem to be caught in the middle of this debate. on the one hand you have critics saying too much was done for wall street. on the otherand you have the critics saying too big a hand, government hand in the economy. what does it is a about the administration policy the way you've sold that policy, that you have these two raging sets of criticisms coming at you? >> i mean maybe what it is as is we ended up in the sweet spot, right. if there is a group that says did you too much and a group that says you did too little, maybe we ended up

with what was possible. and i think that is important. i think, you know, what all of us need to think about is where are we now. where do we go from here. and i think with the unemployment rate where it is. with job growth, again it is incredibly important that we are now growing again. the change from where we are, when we came into office is dramatic. but we have to say how do we get the kind of job growth that will really bring that unemployment rate down quickly. that has to be our focus. and we can't let the american people down. >> woodruff: when you said a moment ago that you would have been, knowing with what you know today would you have been more aggressive, in what way? >> well, i think you know, what i was trying to give is a sense, you know, we took a wide range of policy actions. everything from the stress tests and trying to recapitalize the banking system, to the recovery act, to a housing program to prevent foreclosures. to you know the cash for

clunkers program eventually. you know, so i think what you would say is you would think about each one of those. and in what way could it have been more aggressive. what more could one have done to try to, you know, get even more aid to the economy. what we now, i think understand, is just the shocks that hit us in the fall of 2008 were enormous. and i think they've affected the economy in a way that again very few analysts at the time anticipated. and we all have to learn and think for the next time of hopefully we'll never have a next time but to learn from this what you could have done better. >> woodruff: and finally words of advice for your successor? >> i think it's probably to keep learning. that not assume that we know everything. and to actually, you look at all the information. you be as aggressive as you can in processing th information. but to keep a certain

humility as we analyze it and to make sure that we're evaluating all the new information and doing the best that we can for the american people. >> woodruff: christina romer, the chairman of the president's council of economic advisors on your last day at the white house. thank you very much for talking with us. >> it's wonderful to be with you one last time. >> lehrer: now to another part of the labor story. it's about those who have jobs, but are being asked to do ever more. newshour economics correspondent paul solman reports the rise of the burned-out worker. it's part of his ongoing reporting on "making sense of financial news". >> reporter: by this winter, when the great recession hit the two year mark, boston nurse ann driscoll's patient load had become truly daunting. >> they've taken a lot of nurses aides away, they've taken the staffing down, they've closed an i.c.u. and we feel that it's going to lead to bad quality patient

outcomes. >> reporter: in california, flight attendant ramona areleno- snyder also feels overworked and underpaid. >> we're working more, but we're not seeing any rewards for that. >> reporter: ditto for maryland public defender emily livingston. >> we are doing more with less. we have fewer attorneys right now handling an increasing caseload. >> reporter: and in boston, architect lee braun has had to do more in fewer hours since his workweek was cut to four days. >> it kind of makes you wonder what recovery looks like. i mean, you know, if you're able to do more with less and you just keep doing that... >> reporter: well, then employers will be reluctant to start hiring again. and folks both without and with jobs will suffer, too. at a mott's plant in williamson, new york, shelley snyder is on strike, in part because she was pressed to work overtime. >> i don't think i should be on call or have to work 90 hours a week to make apple sauce.

i just think it's crazy. >> reporter: the pressure recalls worker speed-ups of the depressed 1930s, famously satirized by charlie chaplin in the film "modern times"-- management pushing workers to the edge or, well, beyond. the official speedup data aren't in yet on this downturn, but juliet schor, author of several books on work, including "plenitude" and the 1991 bestseller, "the overworked american," says high unemployment with no drop in output means overwork. >> we do know that we had massive layoffs. the workers who are left are doing much more work, and so we're seeing a lot of anecdotal evidence of rising stress, burnout, and unmanageable kinds of schedules for people. >> reporter: a burned out workforce? "yes," says bill driscoll of robert half, a staffing firm, "that's what workers report." >> we surveyed 1,400 people

across all lines of business in different jobs, and 37% said that they were overworked and underpaid. four in ten said, as things improve, they're going to be looking for another job. >> reporter: take airlines, please. they've cut a sixth of their workforce since the economy flat-lined, on top of cutbacks in 2001 never restored. areleno-snyder flies for a major carrier. >> we took a 33% pay cut, initially, after 9/11. we're working longer hours. we're getting less rest on our layovers. we have fewer flights, which means the flights that we do have are packed, so we have people who are more grumpy because they are on planes that are crowded. >> reporter: jetblue's steven slater is the iconic example, of course, though lacking footage of his passenger dust-up and subsequent suds-supported slide to freedom, one can only imagine

how it actually looked. >> i love you! >> i love you, too. >> reporter: arellano-snyder neither approves of the behavior, nor thinks any of this is funny. >> i'm just tired, you know. but a lot of times, you have a delay, whether its mechanical or weather delay, and then you end up with even less rest than 9.5 hours. so you might get maybe eight hours behind the door, which "eight hours behind the door" means you get to your hotel and you have exactly eight hours before you have to go back to the airport. well, you have to be back at the airport an hour before your flight, so that already cuts that down to seven hours behind the door, and that doesn't include the time it takes you to fall asleep. you're pretty tired when you get up in the morning and, sometimes, it's hard to even get yourself up in the morning. >> reporter: given layoffs at his firm, architect lee braun is grateful for a job to support his family, even though he too is working harder. >> you feel like you've got to

keep your job, so you've really got to do your work well, and work hard and, you know, do what it takes. >> reporter: is that a good thing or a bad thing? >> i think, from an employer's perspective, its probably a pretty good thing. >> reporter: and a good thing too for that old ideal of economics-- productivity, turning out more stuff per person. juliet schor has analyzed data from time/motion studies of the sort that began in the 1900s. this one tested ways to save time in the stamping of order forms. >> there's almost no data on this topic, but i happened to have found an amazing data set. it shows, when the duration of unemployment goes up, people work harder and faster in the workplace. >> reporter: during the current job drought, says economist andrew sum, productivity has jumped a stunning 7%. >> we had one of the highest, you know, 15-18 month gains in productivity since the end of world war ii. yet at the same time, there is no evidence that the average worker has received an increase in their real weekly wage as a result of that productivity gain. for the most part, the vast majority of these gains went in

the form of increased before-tax corporate profits. >> corporate profits have, in fact, been quite high. >> extraordinarily high in the last 18 months. >> reporter: at mott's, hourly workers are on strike since their profitable parent company, dr. pepper snapple, cut their pay and benefits. again, line worker shelly snyder. >> if i come here and i give you my life, and i'm here and i work and i do my job and i make a good product and i make you money, why should i have to make less? >> reporter: but at dr. pepper snapple, bob callan says the company is no different than any other facing a tough competitive environment. >> we're focused on making sure that that facility can compete in the marketplace, and that we have... we convert williamson into an efficient operation that has a competitive wage structure. that is our focus. >> reporter: for workers and those they serve, though, there are real costs to doing more with less. in maryland, attrition has

forced fewer public defenders, already a stereotype of overwork, to handle more cases than ever. in the last two years, emily livingston's average caseload grew from 12 to 20. >> it is sometimes physically difficult to handle that many cases in a single day. sometimes, we'll be in front of the judge in one courtroom handling a case, and we'll be told that were needed in the other courtroom, that our cases need to be resolved in the other courtroom. so its a juggling act, definitely, now more than ever. >> reporter: livingston is hoarse from bronchitis that just won't quit. she feels she shouldn't take time off, though. >> if you've got, you know, clients who are in lockup, you want to come and you want to make sure that you're there for that client to get those cases resolved. we don't want to let them down, so were working harder to make sure that we don't. >> reporter: working harder in speeded up america. and with an unexpected productivity decline in the last quarter, there's now even data

to suggest that american workers, though mostly in services these day may be, like workers of the past, reaching their limit. >> woodruff: next, margaret warner wraps up her reporting trip to iraq, a country where power shortages are part of daily life. >> warner: mofak mohammed, a 51- year-old father of four, is alone after a day at work. a factory manager nearby lets him tap into its power source a bit during the day, but at night, he has none. >> ( translated ): i have a wife and four kids. in this house, we all have to sleep here on the cool floor. because the heat here is unbearable.

so i had to send my family to my relatives' house. >> warner: it's late summertime in iraq, and the living is anything but easy. with daytime temperatures averaging 120 degrees, iraqis are stuck with only four to five hours of power a dayrom the national grid. the electricity shortage affects every activity of daily life, in the smallest homes or in giant hospitals like this one in fallujah, which has to rely on its own generators. pediatrician dr. samira abdul ghani says the acute power shortage is causing major health problems in her young patients. >> believe me, there are many cases of heat stroke. there are a lot of cases of dehydration, there are cases of exhaustion, simply because of the hot weather and... >> warner: for smaller businesses, it can be a struggle.

in baghdad, mohammed kasin carves wooden furniture in baghdad. it's hot work, but he gets by. >> ( translated ): when we have a break at noon, we go and take a shower, and drink a lot of cold water. >> warner: his boss, shop owner abdul amir kakhim, says before the 2003 invasion, power wasn't a problem. and he's angry that it is now. >> ( translated ): previously, we didn't have to use a generator, but right after the war, we got one. i blame everyone-- the government, the americans and the iraqis. >> warner: public anger over the electricity shortage erupted in protests in several southern cities this summer. rioters in basra smashed windows in government offices, police fired on the crowd, killing two. the u.s. government says it has spent $5 billion to upgrade

iraq's electricity grid since the 2003 invasion, and the iraqi government says its laid out an additional $6 billion since 2006 all to build new plants and transmission towers, and rehab older plants like this. the doura power plant, in a south baghdad, is supposed to supply a quarter of the city's electricity. plant manager gazi essa gives us a tour of his older unit, dating from the early 1980s. he says it's so worn out that he doesn't dare run it at full capacity. >> there are so many parts very fatigued, there is leakage here and there. >> warner: essa knows hes letting his customers down, but doesn't know what else to do. >> it is a very difficult time for us.

we are spending 24 hours here. we keep the day and night here to keep these units and the others in operation. in fact, we are feeling sometime shy from the people, but it is out of our hands. >> warner: actually, iraq now generates 50% more power than it did before the invasion. but if you live in baghdad, it doesn't feel that way, because baghdadis aren't allowed to be the energy hogs they were during the days of saddam. the government now distributes energy equally across the country, says raed al-haris, the deputy minister of electricity. >> during saddam regime, there's an order from higher authority that baghdad should be 20 hours or 22 hours on, and two hours or four hours off. in the governorates, it was vice versa. >> warner: that's out in the rest of the country. >> yes, 20 hours off and 4 hours only on. that's why, during that regime, when you come to baghdad, you didn't recognize that there was a problem. >> warner: now, in fact, the tables have turned.

some other regions, where most of the power is produced, are refusing to send baghdad its fair share. that's the new iraq? >> yes, this is the new democracy. >> warner: the bigger problem, he said, is that energy use has soared over the last seven years. shouldn't it have been anticipated, that demand was going to soar? is this a huge failure of planning? >> right, exactly. there's no good planning. they did not concentrate, neither the americans nor our government, for the electricity. >> warner: the shortages don't keep iraqis from buying all the latest energy-gobbling items. we found muhanned kadim in baghdad's karada district loading up electric appliances for his retail store outside the city. >> ( translated ): i sell all kinds of air conditioners. everybody is buying air conditioners now. >> warner: washing machines, refrigerators and water heaters are also flying off the shelves.

a lot of the items are cheap, inefficient goods from asia that further strain the system. salesman raheem badia says the national grid is so unreliable that he can scarcely keep small personal generators in stock. >> ( translated ): since the fall of the regime, how many houses have been built and how many air conditioners are being used in these houses. in the past, a house had one. >> warner: here's one way iraqis beat the power shortage. entrepreneurs buy giant gas- fueled generators like this one, and plop them down on a city street. they sell electricity to anyone on the block who wants to tap in at a pretty profit. among their cuomer hahlam ibrahim ahmed and her extended family. like many middle-class iraqis, they cobble together power from the national grid, a neighborhood generator, and a small personal one.

>> ( translated ): we have to wait till 1:00 in the afternoon to start doing things related to electricity, like washing clothes. or if i have to go visit or to the store, and need a quick shower, there is no power to dry my hair. so this situation changes our life completely. >> warner: what about refrigeration? how do you keep your food fresh? >> we cook just enough for dinner on a daily basis. what's leftover, we throw away. life in iraq is very hard. >> warner: the hard life never seems to end. people fortunate enough to have a personal generator spend literally hours in gas lines, waiting to fill up their car tanks so they can siphon it out for generator fuel at home. there are exceptions. the lights never flicker at the open-air ice cream shop we visited last week. the place has been hit twice by

terrorist explosions. but the insurance that owner moustafa mahmoud abdullah seems most insistent on is what keeps the ice cream cold and the customers happy. >> ( translated ): i have three giant generators, and all the power that you see in this shop is because of those generators. i never depend on the city power, because it comes backor a short time only, then goes out. >> warner: how much does that cost you? >> ( translated ): the total cost of running a generator to keep all the power that you see, on a monthly basis, is 21 million iraqi dinars. >> warner: that's a lot of ice cream cones. to iraqis who are eager for the good things in life, but aren't generating enough income to go entirely private, the

governments advice is wait . wait for another 2-4 years as new plants now under construction gradually come on line. that's cold comfort for the moufaq mohammeds of this country, who could face many lonely summer nights ahead. >> lehrer: and to the analysis of shields and brooks-- syndicated columnist mark shields, "new york times" columnist david brooks. mark, we just heard margaret's, another of her superb reports, the last of her superb reports from iraq. and of course there is also middle east peace this week, the end of combat operations in iraq. is president bush... president bush... i i'll get this right in a moment. president obama, does he get big points on the international front this week? >> may get big points, jim. they don't translate immediately into political advantage at home where the economy remains the dominant issue. but i-- . >> lehrer: it just doesn't

matter that much. >> i think that the middle east peace deserves credit for it. i am cautiousloptimistic, probably more cautious than optimistic. i think there are things going on this time in part because the reality of mr. netanyahu is in a far stronger position than he ud barack in 2008 at home to sell it. i think it is an imperative nurtured by both king abdullah of jordan and president mubarak of egypt and the other sunni countries that are interested in containing iran and shi'a influence. so i think there are factors here. i mean it's still a tough slog but i think it's positive development. >> lehrer: but does the american people, do the american people care that much about middle east peace any more? >> i think if there was a realistic process for some

radical improvement they would care. if there was a prospect that we could somehow diffuse the iranian nuclear threat they would care. because that really does affect our troops over there. but i think realistically there is really little chance of peace between israel and pal en-- palestine over the next few years. the israeli public is disillusioned after the withdraw from gaza. the palestinian-- the palestinian authority is relatively weak, doesn't control gaza at all. and so the fundamentals just aren't there. so i think most people have that missouri show me attitude so right now the enthusiasm in america and maybe the middle east just isn't there. but if there was a breakthrough, i think people would rally around that. because as we have seen it really does affect our lives. >> lehrer: but relate that to mark's point that in its current environment, when all that really matters is the economy and jobs. >> yeah, no, that's absolutely true. i mean we went through several security elections. so we shouldn't forget that it can happen. but the normal thing is it's

jobs or the economy or some domestic issue and that's certainly true when the unemployment rate is 9.6. >> some brighten couraging-- maybe it doesn't mean anything. this week we had hamas doing its best to sabotage the talks by killing four israelis in one day and wounding two the next. and it didn't stop the talks. >> lehrer: didn't work. >> that's right. and that to me, in the past that would have been an excuse. >> i would was at sinner a year and a half ago with shimon perez and abu mazin and the relationship of the two men could not have been closer. they are old warriors, if that doesn't mean peace is happening because the relationship at the top level doesn't really determine what is going to happen and that is deep down and there is no move. there. >> lehrer: what is your specific reading about today's jobs numbers within i think it's what we have to expect. the financial cries sis not like a normal recession. if you look at the ken rogoff harvard has done this

book of serving 800 years of financial crises and the lesson of that book is that we have very long, slow recoveries. you don't get the quick upturn you get everywhere else. it just drags on. now politically the chall seng can we do anything about it. and for a time i thought we could. and we threw a lot of stimulus money at it. but i'm-- that we could do anything fundamental about it over the next couple of years and what we should be focus on is making sure the recovery when it does come is a really strong and broad recovery. in other words, don't focus on the short trying to-- up the growth next quarter but say okay, but in three years we're going have a really strong economy with shared responsibility and that mean goesing back to basics. >> but the politics of that are-- it's a two-year politic problem, not a three year. >> david presupposed a national city manager who has got a ten-year contract. i mean that isn't the way it works. and i think that the-- any leader at a time like this, a time of crisis who does

not appear to be taking action and is not acting does so at his own political peril. i am not sure and confident that there are remedies that are going to-- the president said time and again there is no silver bullet. there isn't. >> lehrer: but there is talk that he's going to do something next spring. >> he's going do something, but i think there are a couple of things that probably ought to be counted on. one, not the least of which is we had a month ago, last august, people were talking openly about a double dip. i mean it was encoaging that we did have-- . >> lehrer: double dip meaning going back and have another recession. >> it was encouraging. the glass is one-third full. any time you begin the economic news, it wasn't as bad as expected rather than than better than expected, i mean it's not exactly a time for celebration. but i think that is not

important. i do think that the reality is that unemployment is at 9.6%. and that is the story. >> but the danger of the financial crisis is people do try to do something short term and they end up creating so much debt or so much other problems or so much inefficiency they end up making things worse and you get these debacle, the debt debacles. the administration is talking about some, i think responsible things they'll probably unveil next week. maybe a payroll tax holiday. maybe some business tax cuts. maybe some infrastructure spending. a lot of little things but we should not expect that is going to have a huge impact certainly not this year. maybe not next year. i think we just have to, i have just lost a little faith that whave the expertise or capacity to fine-tune an economy in this shape which we don't really understand. >> lehrer: countries be-- christina romer told judy a little while ago that she had some, just paraphrasing what she said, that she wishes the administration had been more aggressive. now whatever everybody

thought whether it was aggressive or not aggressive, republicans have been all over what the white house has done, what the democrats and congress have done. so how do you read that? >> it is an intellectual debate over what to do and what caused the problem. the romer case is that there is a model and if you throw money into it will you produce jobs. the counterargument-- . >> lehrer: if you take federal money and you spend it for bridges and whatever is going to -- >> or throw it out of airplanes or helicopters. if you pump money in that will stimulate activity that is a plausible model. the cbo has projections based on that model. the counterargument by most republicans is that psychologically it doesn't work. because people see the debt coming and they think oh, they're going to tax me so i'm going to play it safe. they see the debt rising and they say i don't feel more secure, i feel less secure and psychologically when they feel less secure businesspeople are less likely to take risk and invest than hire. these are the two arguments and i'm on one side of it,

the john taylor side but to be honest nobody really knows the answer. >> lehrer: and are you kind of on the other side. >> i'm on the other side. >> lehrer: are you on the aggressive side. >> i do want to say, shout out to christina romer. i think she's been good and i think she's about as good a spokesperson for this administration as the administration has. i mean there is a optimism about her just an update -- upbeat quality. but i that i politically, jim, what the democrats have to do right now is they have to redefine this election. we are in an election right now where all the polls show that the republicans are ahead. all the available data that all of us run into every day, the races that are being fought over are democratic seats, not republican seats. the democrats are playing defense. the republicans offense. and i think where the president has failed politically is to make a case on the economy. and i think to draw the differences. and it's more than just

trying to blame george bush who he called on the phone this week, trying to remind people of that policy. i think it comes down to he's got to draw the distinction on the tax. the bush tax cuts are going to expire on december 31st for everybody across-the-board. and i think he's got to be willing willing to say the republicans are willing to raise everybody's taxes and put the economy in jeopardy just to defend tax breaks for the top 1% of americans. >> lehrer: you think that has got to be e -- >> i think if he does that, i just think he's got to recount it otherwise it's parallel skiing and republicans are ahead and they're going to continue ahead and getting closer to the finish line. >> republicans welcome that fight. >> lehrer: they would love that. >> any fight about taxes. they are like a tank. they don't necessarily shoot diversely but in their target zone they're pretty good and taxes are their target zone and their argument is that we want to cut everybody's taxes but if you raise taxes on those top rates, will you be increasing taxes on the majority of small business profits.

and that's the argument they'll make and that if you can't tax small businesses at higher rates and expect them to hire more. i'm not sure politically how that works out. i will say we have had several elections with john kerry and al gore and others who said i want to cut taxes on the top 1%. they want to, they don't want to do that the republicans have done pretty well often in those fights. >> lehrer: speaking of pure politics, what did you think of the lisa makosski loss in alaska and joe miller victory. >> it's a lesson about aggressiveness. the republican primary voters want not only opposition but really aggressive opposition. they don't want a hint of compromise. they want you to be superaggressive, not as they say get along and go along. so i thought that was the key message. >> lehrer: aggressive against obama, democrats. >> everything, change the tone of the next senate, more aggression and it raises the idea of repealing health care. >> by their definition your political opponent is an enemy. it really is.

i mean it's the sharron angle mantra. >> lehrer: in nevada. >> and you know, ronald reagan was about as formidable an adversary as anybody on the democratic side, principlesed, conservative. but at 5:00 he could sit down and have a drink with tip o'neill. under the rules and under the morees of these folks, any cooperation, any civility toward the other side is a sign of collaboration and collusion. and boy, i think that doesn't argue well for our politics or this city. >> i mean my whole life is based on what mark just said but i have said we should wait and see. in massachusetts and other places we've had people who were pretty partisan but surprise you and sometime conditions nice. reagan was plenty tough but he was nice, mark's right. and maybe they will be tough. personally, the republican party is not heading in the direction i want to see. i do think you have to collaborate. and that has become a dirty

word. there is no question about that. >> lehrer: okay. thank you both very much. >> thank you . >> woodruff: finally tonight, the latest from the gulf coast. b.p. said today that it successfully removed the blowout preventer that failed to stop the oil spill from the macondo well. it's been an especially tough summer along the gulf, and yesterday's platform explosion only added to the fears about a double economic whammy. but one important tradition lives on this labor day weekend. newshour correspondent tom bearden has our report from morgan city, louisiana.a- 7 ♪ ♪. >> reporter: louisianaans have a lot of pride in their music, their food, their culture. but they have a special pride in their ability to throw a party

. this year marks the 75th annual morgan city shrimp and petroleum festival, a celebration of the two biggest local industries. it's getting some pretty unusual national and international press attention in the wake of the b.p. oil dis as ter. putting the two together strike some outsiders strange but the editor of the morgan city daily review steve shirley says there's nothing odd about it at all. >> it's a harvest festival but it's not just for fishing or seafood. we harvest natural resources. that includes oil, natural gas, that riferp-- shrimp, flounder, snapper. i mean it goes on and on it is a very, very diverse harvest festival. it's something that everybody can enjoy. >> for weeks the paper has been cranking out special edion sections about the festival. not only is it the 75th

anniversary, it's also the 150th anniversary of the founding of morgan city itself. shirley says the advertising business has been pretty good. >> the same can't be said about the shrimp and oil businesses. there is a cloud over the town because both are facing very uncertain futures. >> take shrimper matt tune, for example. he's pull approximated the nets from his boat and plans to stay at the dock until october. one of the best shrimps he knows came back with a catch that barely covered his expenses much less make a . >> i know are you looking forward october, but what about beyond that, what about next year and the year after? >> i really don't know, sir. i'm trying to just focus on right now. and i am really worried about the next year because when exxon valdez, you know, it was like ten years there that nobody was able to fish. but we're hoping and praying that it's not that long for us. >> reporter: but what really hurts is that the shrimp people will be eat teg festival didn't come from local waters because

nobody's catching very many shrimp. >> i hate to see them have to bring something down from the east coast. we've never had to do that before. even for hurricane andrew and other hurricanes, we had to shut down the shrimp festival for hurricane andrew but we still caught our own shrimp. we didn't have to borrow them from somebody else. morgan city has a scrap yard where old oil field equip suspect cut up for salvage. people who work in oil here want to make sure today's business doesn't meet the same fate. bim's company makes pressure vessels. large steal tanks us offshore and on barges. he has been able to avoid layoffs so far but he's afraid that the ongoing federally imposed moratorium on deep water drilling will cause some companies to move their rigs to other countries. at least one rig has left for egypt but the administration says the industry's dire predictions of an exodus haven't come true. >> the biggest thing that concerns me about all this is the long-term implications.

these projects in deep water tend to be very long. multiyear cycle projects. and we're fairly far down the food chain. we don't get involved until the latter stages of the project. and if they're not out drilling wills today and making discoveries and doing engineering a year from now, there's not going to be any work for us to do. and that's my big concern is how long this moratorium lasts within the deepwater drilling moratorium is set to expire in november. a lot of people around here had hoped it would be lifted earlier. now there is concern about what might happen in the wake of yesterday's production platform fire. newspaper editor steve shirley. >> there is a very real concern right now that it will literally price us or regulate us out of the market. and that the drilling rigs will leave. the labor force will leave. and we will be left with a fishing village. >> which doesn't support a whole lot of people. >> does not

. it's a scary prospect. if we can't put our oil patch to work what is going to be left of south louisiana, even places like houston, texas. it's not just morgan city or south louisiana concern. it's a united states concern. >> i could tell the beach wasn't as crowded. the restaurants weren't as crowded. >> reporter: morgan city mayor tim moth says the town is determined not let any of this put a damper on shat riferp and petroleum festival. >> there was that poll done earlier this year that said louisiana is the happiest state in the nation. and i think that is reflective of our community too. certainly things like the moratorium caused some concern but you get to kind of put some of that aside for a weekend like this and kind of just enjoy each other's company, enjoy the music. enjoy the food. >> moth and others in morgan city hope the attention the festival has attracted continues after the rides have stopped. as louisiana struggles to get back to normal, after the oil disaster

>> lehrer: again, the major developments of the day: private sector hiring increased in august, but the economy still lost 54,000 jobs and unemployment rose to 9.6%; on "the newshour," christina romer, the outgoing chair of the president's council of economic advisers, said the administration should have been more aggressive with its economic policy; and hurricane earl lost a lot of its punch as it churned north off the east coast. and now to hari sreenivasan, in our newsroom, for what's on the newshour online. >> sreenivasan: you can ask paul questions about worker burnout on his "making sense" page. margaret has a blog post from iraq, a woman's guide to embedding with the military. from the politics beat, an interview with the head of the democratic congressional campaign committee about extending the bush-era tax cuts. plus jim, a former marine, was the honored guest of the commandant of the marine corps at an evening parade in washington last week. we have video highlights from that event. all that and more is on our web site, newshour.pbs.org.

judy. >> woodruff: and that's the newshour for tonight. on monday, we'll look ahead to midterm election races in four key states. i'm judy woodruff. >> lehrer: and i'm jim lehrer. "washington week" can be seen later this evening on most pbs stations. we'll see you online, and again here monday evening. have a nice labor day weekend. thank you and good night. major funding for the pbs newsur has been pridedy:

and with the ongoing support of these institutions and foundations. and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. captioning sponsored by macneil/lehrer productions captioned by media access group at wgbh access.wgbh.org

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